$60B in relief for hurricane Sandy victims? Just a first installment on a $1T bill coming due.

Let’s start with the backstory. When hurricane Sandy came ashore on October 29th of last year, it took the lives of over one hundred people and triggered perhaps as much as $80B of damage across the Middle Atlantic and New England states. A terrible tragedy, aggravated by timing that couldn’t have been worse. The catastrophe occurred one week before a pivotal national election, and as the country’s leaders were arguing over how to best avoid the fiscal cliff. The partisan wrangling is still ongoing, but Congress somehow found the time and the heart needed to pass a $10B emergency measure around the first of the year. Yesterday the House followed with an additional $17B for immediate relief needs and another $33B bill for longer term rebuilding. The Washington Post and many other newspapers carried the story in this morning’s print edition.

That same morning paper carried this article: U.S. to face big infrastructure price woes. Ashley Halsey III was reporting on a projected $1T gap in infrastructure investments by 2020. The entire article is worth the read, but here are some excerpts:

This week’s bold warning on infrastructure comes weighted with the sort of price tag that seems abstract to many taxpayers in a nation where a financial bailout costs $500 billion, a war is $113 billion a year, the annual deficit runs to $1 trillion and recent spending cuts amount to $110 billion…

…“Infrastructure is the most important thing you never think about,” said Jim Hoecker, former chairman of the Federal Energy Regulatory Commission. “Infrastructure is a collection of critically important strategic assets, and we generally take them for granted.”

If the problem is not addressed, power outages will become more frequent, prices at the supermarket and department store will inch up, traffic will detour around bad bridges, household incomes will drop and millions of people will lose their jobs.

The challenge of rebuilding a post-World War II infrastructure at the end of its natural life — roads, bridges, the electrical grid, water and sewer systems, ports — has been well documented by myriad experts. One of the most meticulous accounts has come in a series of reports by the American Society of Civil Engineers (ASCE), which delved into each failing system to calculate not just the cost of restoration but the economic and personal price of doing too little or nothing at all.

We’re told that unless we make the needed additional investments,

“Job losses will mount annually, and by 2020 it is predicted that there will be 3.5 million fewer jobs throughout the country,”…. “The expected impact for every household in the U.S. will be an average loss of more than $3,000 per year through 2020 in disposable personal income . . . due to job cutbacks and declining business productivity.”

After that, it gets worse: “Expected loss of disposable personal income is estimated to exceed $6,000 annually from 2021 to 2040.”…

…The ASCE reports, produced by economists and engineers, have distilled the costs with the assumption that most Americans are capable of connecting the dots that lead to them. For example, the latest paper says bars and restaurants will lose $55 billion by 2020 if infrastructure needs are not met. Retailers will lose $95 billion.

Three things are striking about these two articles and their juxtaposition.

They are unlinked but should be. The article on U.S. infrastructure fails to mention an additional payback from such investments in the form of improved resilience to natural extremes ranging from weather, flood, and drought to earthquakes. We know from experience with Katrina and Sandy that our nation’s critical infrastructure is unacceptably fragile…far too brittle with respect to natural hazards. We can fix this by taking such extremes into account during the redesign and rebuilding of these major infrastructures. Other studies have found that building the resilience of such critical infrastructure provides a roughly 4:1 payback. By modernizing our infrastructure, we reduce the bill coming due from future disasters. Similarly, much of the Sandy supplemental, if used properly, can rebuild infrastructure not to its prior standard but to a new, more resilient one.

They are framed negatively when they could be framed positively. This is our opportunity to make Americans safer, protect businesses from disruption, and stimulate the economy by putting Americans back to work at one and the same time. Ms. Halsey’s article mentions post-World-War II construction. Immediately following the war, in part because we undertook such projects, US GDP doubled over a period of just five years.

They could have addressed explicitly another fraying critical U.S. infrastructure: Earth observations, science, and services. Our polar-orbiting weather satellites are just one launch failure away from a disastrous gap in monitoring capability. The nation’s weather radars are outdated and aging. We’re failing to make needed investments in stream gauge networks, seismic instrumentation, computers, professional education and training, the social sciences needed to translate warnings into effective public response, and much, much more. The additional good news here is that these costs represent no more than roundoff error in the size of the overall bill.

Let’s build a new America, an America that’s resilient to hazards and sees them coming.

Quote

“False facts are highly injurious to the progress of science, for they often endure long; but false views, if supported by some evidence, do little harm, for everyone takes a salutary pleasure in proving their falseness.”
Charles Darwin
The Origins of Man, Chapter 6

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“False facts are highly injurious to the progress of science, for they often endure long; but false views, if supported by some evidence, do little harm, for everyone takes a salutary pleasure in proving their falseness.”
Charles Darwin
The Origins of Man, Chapter 6